The 6 Best Online Stock Trading Platforms of 2021
The best online stock trading platforms make it easy for investors to seamlessly trade stocks, bonds, exchange-traded funds (ETFs), and more without charging a fortune for the privilege. In fact, many online stock brokerage firms let you make certain trades for free, while some let you get started without a burdensome minimum account balance requirement.
To help, we compared an array of top stock trading platforms to find the best online options for different types of investors, whether you’re an active trader, a passive investor, or somewhere in between.
The 6 Best Online Stock Trading Platforms of 2021
Fidelity: Best Overall, Best for Beginners
E*Trade: Best Web Platform
TD Ameritrade: Best for Mobile
Charles Schwab: Best for ETFs
Vanguard: Best for Low-Cost Funds
Betterment: Best for Hands-Off Investors
Best Online Stock Trading Reviews
Ready to trade stocks? It’s smart to compare all the top stock trading platforms before you open an account.
Fidelity: Best Overall, Best for Beginners
At a Glance
Low fees on almost all products
Variety of wealth management options
Robo-advisor option for simple investment strategies
200 Investment Centers around the country
Uninvested cash gets tucked into a money market fund
In the last decade Fidelity has followed the industry trend towards low-fee funds and has expanded its products to include a variety of competitive alternatives. As with all online trading platforms, Fidelity provides investors with commission-free U.S. Stock, ETF, and options trades.
Fidelity also offers no account fees or minimum deposit when opening a retail brokerage account or an IRA. In fact, Fidelity does not charge fees for low balances in mutual funds, or for IRA closeouts, late settlements, reorganizations or insufficient funds.
Low fees are what makes Fidelity stand out, offering one of the lowest margin rates (4%) on the market as well as 4 different mutual fund products with zero expense ratios.
Advisory fees for these management services will range from 0.50% of assets invested per year to a maximum of 1.50%. Fidelity also has 200 Investment Centers around the country to help investors who like a more personalized experience. Due to COVID-19, these Centers are currently only offering phone consultations, and paper submissions in self-serve dropboxes.
Fidelity offers plenty of different ways to invest. If you have a single investment goal in mind, you can either manage the portfolio yourself or use the company’s robo-advisor Fidelity Go. For larger portfolios and a more diverse investing strategy, you can choose from three different wealth management plans assisted by personal wealth management advisors.
Fidelity continues to emphasize its lineup of actively managed mutual funds, which tend to be slightly more expensive than Fidelity’s index funds and those of its competitors like Vanguard.
E*Trade: Best Web Platform
At a Glance
Options contracts are just $0.50 per contract if you make 30 or more trades per quarter
E*Trade Mobile and Power E*Trade Mobile apps allow easy trading on the go, Bloomberg TV, customized stock screening, and third-party research
Managed portfolios have annual fees as low as 0.30% of invested assets
$0 fees for stock, ETF and options trades
A pioneer in online trading, E*Trade provides a large variety of investment options, from simple brokerage accounts for investors new to the market to advanced investing and trading options for those with more experience. There are $0 fees for online U.S.-listed stock, exchange-traded fund and options trades, making it easy for new investors to start building their portfolios.
Options contracts cost 65 cents per contract — which represents the premium paid to the contract writer — on a par with most online brokerages. However, E*Trade will lower that sum to 50 cents per contract for those making 30 or more trades per quarter.
For those who may need more guidance, there are managed portfolios with annual management fees starting as low as 0.30% of assets invested. E*Trade also offers checking and savings accounts that allow you to transfer funds between all your accounts without paying any fees.
E*Trade has over 9,000 mutual funds to invest in, over 4,000 of which are no-load, no-transaction-fee funds. There are also six different types of individual IRAs, and five IRAs geared towards small businesses.
While high volume traders can take advantage of the lower trading commissions for options contract trading, investors who aren’t as active won’t be able to take full advantage of this benefit.
There’s a $19.99 transaction fee for mutual funds not on the no-transaction-fee list, and brokerage accounts require a $500 minimum to open which, although not a large amount, is higher than other brokers offering $0 minimum opening balances.
TD Ameritrade: Best for Mobile
At a Glance
$0 fees for stock, ETF and options trades
Ability to trade in Forex and cryptocurrency
Web and mobile platforms available
Advanced analytical and stock tracking tools
TD Ameritrade is one of the largest online stock trading platforms. They offer investment options that some other platforms don’t — all of which are optimized for mobile functionality via their robust thinkorswim platform.
Both TD Ameritrade’s web platform and mobile app give access to all your trading information as well as the company’s educational, research, and planning tools. This includes the TD Ameritrade TV network, daily market commentary, and even social sentiment analysis from Twitter.
The thinkorswim platform allows experienced investors to run simulations before actually putting money into a trade, as well as generate advanced charting and earnings analysis. You can also create Watch lists and receive alerts that track the price, volume and position of stocks on your list.
Aside from the standard brokerage accounts with $0 commissions on online U.S. and Canadian stock, ETF and options trades, TD Ameritrade also offers free Forex trading in 21 currencies and the opportunity to purchase IPO stocks either on the primary market if Ameritrade is part of the seller group or on the secondary market.
Investors can add cryptocurrencies to their portfolios through ErisX, a company that offers access to cryptocurrency spot and futures contracts.
TD Ameritrade offers over 13,000 mutual funds, with several hundred of no-transaction-fee funds to choose from. Where TD Ameritrade could do better is with no-load mutual funds, where commissions are as high as $49.99, much higher than many other brokers.
Charles Schwab: Best for ETF trades
At a Glance
$0 fees for stock, ETF and options trades
Ability to invest in foreign markets
Large variety of research tools
Invest on your own or with an investment expert at no extra charge
Schwab has two main trading platforms — Streetsmart Edge (desktop-based) and StreetSmart Central (web-based) — though they also offer a streamlined tool called Trade Source for buy-and-hold investing. Basic trades can be done either at Schwab.com or on the StreetSmart mobile trading app, while options trading can be done via the StreetSmart Central platform.
Investors looking for a customizable mobile option can use StreetSmart Edge to create multiple trading layouts, track and monitor buying power, use a variety of trading tools, and livestream CNBC, among other features.
Investors opening a brokerage account with Charles Schwab can do so with no required account minimum and enjoy $0 online stock, ETF and options trading and management fees, although there is a standard 65-cent per options contract fee. A full-service brokerage, you can also invest in traditional, Roth and Rollover IRAs with zero fees for online equity trades.
Through Schwab’s Global Account you can trade stocks in 12 foreign markets, again with a $0 account minimum. Schwab offers self-directed trading options but will also provide automated trading as well as planning and investment with an expert advisor at no extra charge.
Finally, Schwab Stock Slice allows investors to purchase portions of an individual stock share (also called a fractional share) for as little as $5.00 per slice.
Schwab provides multiple research tools, including not only their own equity ratings but also reports from Morningstar, Credit Suisse, and Market Edge, among many others. Real-time news and access to earnings reports as well as market commentary by Schwab’s in-house experts help provide up-to-date information on market trends.
NOTE: In October 2020 Schwab announced the completion of its merger with TD Ameritrade. For the purposes of this article we have evaluated them separately as they are still operating independently. The two companies expect their integration process to take between 18 and 36 months to complete, though Schwab has stated that they will keep Ameritrade’s thinkorswim and thinkpipes trading platforms.
Vanguard: Best for Low-Cost Funds
At a Glance
Company-owned by shareholders
Low pricing or no management fees across the board
A large variety of index funds
Personal Advisor Service pairs investors with financial advisors
Unique among online trading platforms, Vanguard is not a privately owned company, but is rather owned by the shareholders of the funds it manages.
This means that the profits earned by Vanguard funds are reinvested in the company which, along with the fact that many funds are passively managed with low management fees, means investors get to keep more of their money.
Vanguard’s particular strong suit is index mutual funds although they do offer active mutual funds, stock trading, CDs, and ETFs, as well as a number of IRA accounts.
Vanguard’s Personal Advisor Services pairs a financial advisor with the investor to analyze investment goals and custom build an investment plan. Once approved, the advisor will manage the fund and periodically rebalance it.
Investors can access their account online to check on balances, receive quarterly reports, and contact the advisor via email, phone or video chat. However, Vanguard offers more limited research and data than many of its competitors, making it better suited to buy-and-hold investors rather than active traders.
Management fees will start at 0.30% of the assets managed and there is a $50,000 minimum required. Fees will be progressively lower as the assets in the portfolio increase.
Vanguard also allows you to transfer funds and ETFs from other companies into their funds so you can manage all your investments on a single platform. Transferring funds from one broker to another can also save you some money, as you don’t have to sell your shares in one fund, pay taxes on the distribution, and then reinvest in another fund.
Betterment: Best for Hands-Off Investors
At a Glance
Access hands-on investing with the help of cutting edge technology and qualified financial advisors
Open a taxable investment account or an IRA
Pay 0.25% per year on your investment balance
You can also opt to pay 0.40% per year for premium advice and unlimited phone interaction with a team of financial advisors
Betterment is a robo-advisor that makes it easy to “set it and forget it” with your investments. In that respect, it may not be ideal for investors who want to actively trade stocks, but a great choice for more cautious beginner investors.
That doesn’t mean Betterment isn’t for stock trading, per se. This investing platform just takes the busywork out of the equation for you, letting you pick an upfront investing strategy that runs on autopilot.
Betterment uses cutting-edge technology guided by the help of financial advisors in order to help you secure the maximum return based on your risk tolerance, investment timeline, and other factors. And, for a 0.40% fee and a $100,000 account minimum, you can get unlimited access to financial advisors.
Betterment has multiple account types, from a taxable brokerage account to a traditional or Roth IRA, or even a Simplified Employee Pension IRA (SEP IRA) account.
For a basic investing plan with Betterment, you’ll pay 0.25% per year on your investment balance, and your individual trading costs are included in that amount.
1..) Investing During COVID-19
With the high degree of volatility the markets have been experiencing over the past months, and which will probably continue for the foreseeable future, you may be wondering how best to navigate the stock market during a pandemic.
Don’t Let Emotions Guide Your Investment Strategy
One of the biggest problems with the markets today is not having a clear idea of when the pandemic-related economic fluctuations will be over. “Uncertainty has been driving our volatility because A), we don’t know how long this thing is going to take,” says Peter Krull, CEO and Director of Investments for Earth Equity Advisors. “ And B), the response from the [Trump] administration has been lacking direction.”
Take the time to analyze and fully review your investment goals. Only then should you take action. Remember, there’s nothing wrong with staying put.
Stay the Course When Investing
Despite the uncertainty, for the most part, investors have stayed away from panic selling. And with good reason, since rapidly unloading assets can have costly consequences on your money.
There’s a reason online trading platforms such as Robinhood have risk disclaimers — they are not responsible for your investment decisions.
Consider Moving to Online Brokers
Since the beginning of the pandemic and lockdowns, online brokerages have seen their volume increase dramatically. Most recently, the hullabaloo around GameStop has shown the outsized impact online trading can have on the stock market.
Part of the reason for the increase in online trading volume is the October 2019 move that cut commissions in the brokerage industry to $0 for many of the more common types of trades, essentially offering free stock trading.
Take Advantage of the Robo-Advisor Surge
So-called robo-advisors — online applications that provide financial and investing advice with little to no human intervention — have seen a surge in users, especially during the early stages of the pandemic.
The advantage of a robo-advisor is that you can easily set your investment goals and the trading platform will take care of the rest, moving assets automatically to ensure you meet your goal. By cutting out the human advisor, investors can save money on fees as well.
All the major brokers, such as TD Ameritrade, Charles Schwab, Fidelity, and Vanguard have come out with a robo version of their trading platforms, with great success.
Likewise, more robo-advisors, like Betterment, offer customers access to a personal financial advisor if they want to be more involved in the decision making process, in addition to offering traditional banking products like checking and savings accounts.
Take a Cautious Approach
Whether or not you decide to invest during a pandemic will depend on your personal finances.
“When you look at investing, you have to look more selectively at the economy,” says Larry Adam, Chief Investment Officer of Raymond James. He points out that within each sector there are going to be some industries that will be struggling while others could be doing very well.
However, you shouldn’t feel obligated to invest during this time either. Again, whether you decide to put money into the stock markets will depend on your financial situation. Don’t invest money that you’ll need to pay for other obligations or that you’ve been saving for a specific use, like college expenses.
As both Krull and Adam point out, tread lightly and determine whether you can handle the volatility that’s likely to continue. “Make sure that your portfolio is consistent with your risk-reward profile,” said Adam.
Important Things to Know About Online Stock Trading Brokers
Long-term active traders should look for platforms that allow certain free trades.
Many successful investors prefer passively managed index funds.
Some firms are best for experienced investors while others are ideal for newer ones.
New investors should work with a financial advisor who can help them craft their investment plan.
Robo-advisors are a great way to get full-service investing help online.
Robo-advisors can also get investors additional perks like tax-loss harvesting and automatic rebalancing.
Don’t forget about annual fees based on how much has been invested!
What to Consider Before You Choose an Online Stock Trading Platform
Learn About Trading and the Stock Market
If you’re just jumping into the stock market, make sure to learn how to pick stocks before starting to invest. Good resources include The Intelligent Investor by Benjamin Graham and Investing 101: From Stocks and Bonds to ETFs and IPOs, an Essential Primer on Building a Profitable Portfolio.
Use the tools and resources provided by online brokers to learn about different investment strategies. If you decide to start buying and selling individual stocks on your own, remember to start small and only use money you won’t miss if your investments don’t turn out the way you expect.
The type of investor you are can determine the right account for you:
Planning to trade fairly often? Go with a platform that offers unlimited low cost or free trades.
Want to put a lump sum in similar investments each month? Choose an account that lets you select the desired level of risk and asset allocation for “hands-off” investing.”
Make sure you use a reputable brokerage
Trading on the stock market, whether with an online broker or an offline one, always has an inherent risk attached, but it can be safer if you follow some simple rules. Check whether your broker:
is a member of the Securities Investor Protection Corporation (SIPC) and the Financial Industry Regulatory Authority (FINRA)
offers the insurance required of a member of the SIPC
has some sort of guarantee of protection against fraud.
Finally, as with any other online financial service, make sure to verify how the brokerage offers online security and account protection.
Decide if you want access to a financial advisor
Learning the ins and outs of stock trading is not something that can be done overnight, so access to experienced advisors can be extremely helpful.
Some of the online stock trading companies we reviewed let you speak with credentialed financial advisors, while others simply offer investments and managed portfolios chosen by financial advisors and other experts.
Either way, you’ll need to think about the type of help you want and whether you want to be able to call or email with any questions you have.
While investing platforms geared to active traders tend to be light in terms of customer service, robo-advisors and other full service investing platforms often let you speak with financial advisors throughout the process.
Learn to Diversify
Putting all your investment eggs into one basket is never a good idea. Stock markets are cyclical, with periods of gains and losses. If you only buy stock in one company, even if it’s a blue-chip stock, you’ll at some point suffer a potentially large loss.
Investing in a variety of companies helps protect your portfolio. However, picking a bunch of individual stocks can be both time consuming and research-intensive.
Your best bet may be looking into diversified financial products such as mutual funds, index funds and ETFs.
Your Online Stock Trading Questions Answered
Which online trader is the best for beginners?
Beginners to the stock market should look for online trading platforms that are easy to navigate, offer comprehensive educational tools and top-notch support and finally, have low fees and minimum account balances.
We chose TD Ameritrade as our Best Online Trader for Beginners because of its overwhelming focus on online education. It also makes it easy for beginners to play around with the app itself, allowing them to create accounts without any deposit, so they can get familiar with investing without having to put any money down.
What is the best website for day trading?
Day trades are when you buy shares of a stock and then sell them before the market closes that same day, ideally with a net profit after commissions. We consider Fidelity, our pick for best overall online stockbroker, an excellent choice for day trading. They offer $0 trades and don’t accept payment for order flow (PFOF), making its price point hard to beat.
What is the cheapest online stock trader?
When you’re looking for a cheap online stock trader, dig deeper than just stock and ETF trades, since all online trading offer these for $0. Your best bet is to go with a discount broker, since these have reduced commissions and as little as $0 to $500 minimums to open an account — though this does come at the expense of advice and analysis.
What trading tools do online brokers offer?
Every online broker offers a different suite of trading tools. The best brokerages, such as E*Trade, provide a wide range functionality, including charting, price alerts, derivatives analysis, and customizable screeners.
What is the best stock to buy right now?
Determining which stocks are the best to buy right now is tricky, particularly due to the increased volatility of the stock market. A good rule of thumb is to consider the price performance of the stocks you’re considering. For many people, the best bet is to invest in index funds rather than individual stocks, since these bundle together multiple stocks for a diversified portfolio with less risk. The S&P 500 index, for instance, has had an almost 10% annual return since the late 1920s.
What are the best stocks to buy for beginners?
Experts agree that a diversified portfolio is key to a well-balanced investment strategy. Beginners may want to focus on big companies with solid track records and solid balance sheets, since these usually carry less risk. While a valuation metric such as the price-earnings ratio is also important, be aware that stocks are usually expensive because they’ve been good performers in the long-term.
Try to avoid the volatility inherent in IPOs, rapidly growing companies, and penny stocks.
How to buy stock online without a broker?
While buying and trading stocks online with a broker takes a lot of the guesswork out and streamlines the process, there are ways you can cut out the middleman almost entirely.
The most common way is through a direct stock plan, which allows investors to buy-in by transferring money from their checking or savings accounts. There are usually mandatory minimums for both the initial purchase and any subsequent ones.
Another option is via a dividend reinvestment plan, which functions similarly to direct stock plans, but with automatic reinvestment of the cash dividends you make into more shares of the company. This may be done for free or for a small commission.
1..) How We Found the Best Online Stock Trading of 2021
The best online stock trading platforms offer similar features, but that doesn’t mean they’re equally suitable to different types of investors. While we considered online stock trading platforms that work best for both newer investors and hardened pros who don’t need any help, we focused on firms that scored high in the following categories:
Online Access
Because our study focused on online stock trading platforms, we gave preference to companies that let you invest online, had easy to use platforms, and provided the investor with multiple means of managing their accounts.
Low Trading Fees
We only considered online stock trading platforms that charge low trading fees or none at all. Research has proven time and time again that fees related to investing can drastically reduce returns over the long haul.
Unless there was significant value in return, we didn’t recommend any platforms that charge burdensome fees or account management fees.
While some online brokers accept credit card payments to buy stocks, we preferred not to include them, due to the risk of high interest rates should you fail to pay off the full balance every month.
Access to Investment Research and Tools
While experienced traders may not put a premium on access to investment research or online tools, newer investors can benefit from this type of help. We gave preference to online stock trading platforms with tutorials, educational content, and different investment tools.
Smart Automation Technology
We considered the kind of technology each platform uses, and we scored those with automated investing tools quite a bit higher. Even if you’re an active trader, benefits like automatic account rebalancing can help you stay on track with your goals.
Platforms that let you set up automatic investments each month were also given preference, since automation ensures you invest each month whether you remember to or not.
Summary: 6 Best Online Stock Trading Platforms of 2021
Fidelity: Best Overall, Best for Beginners
E*Trade: Best Web Platform
TD Ameritrade: Best for Mobile
Charles Schwab: Best for ETFs
Vanguard: Best for Low-Cost Funds
Betterment: Best for Hands-Off Investors
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